The naira appreciated significantly on Friday in the parallel market, closing at N1,590 per dollar, compared to N1,610/$ the previous day. This marks the local currency’s strongest performance since April 8, when it last traded at N1,565/$ in the unofficial market, having hovered around N1,600/$ in recent weeks.
On the official Nigerian Foreign Exchange Market (NFEM), however, the naira weakened slightly, closing at N1,554/$, down from Thursday’s N1,545/$. Despite this marginal dip, the gap between the official and parallel market rates narrowed sharply to just N41—down from N70 a day earlier—indicating a more aligned and stabilizing currency market.
Analysts attributed the naira’s improved performance to a rise in foreign exchange inflows and renewed investor confidence. According to a report by Cordros Securities, total inflows into the FX market surged by 62 percent in May, reaching $5.96 billion—up from $3.67 billion in April.
The report noted that the bulk of these inflows, about 83 percent, originated from domestic sources, while foreign investors accounted for the remaining 17 percent. The increase signals a positive shift after months of liquidity constraints and market volatility.
“According to data from FMDQ, total inflows into the Nigerian Foreign Exchange Market (NFEM) surged by 62.0% month-on-month to $5.96 billion in May (April: $3.67 billion),” Cordros said.
The firm projected that FX inflows are likely to keep improving in the near term as market confidence continues to build. However, it also warned that global trade uncertainties could pose risks to sustained inflows from foreign sources, potentially affecting long-term FX liquidity growth.
Nzubechukwu Eze
